Kamal Ghorui
At last week’s AI Summit in India, healthcare was one of the most animated conversations. From AI-enabled retinal scans promising early blindness prevention to handheld ECG devices claiming to predict cardiac risk in minutes or the smart dashboards projecting ICU deterioration before it occurs. The vivacious energy signalled India’s intent to lead in AI-driven medicine.
But beneath the technological optimism lies a deeper structural shift. Healthcare is no longer being discussed only as a public service. It is increasingly framed as an industrial growth engine. Through initiatives such as the Production Linked Incentive Scheme and Make in India, India is positioning itself as a global med-tech manufacturing hub. The goal is clear i.e. reduce import dependence, strengthen domestic production, attract capital and capture export markets. After COVID-19 exposed the fragility of global supply chains, few would argue against that ambition. India’s medical devices market is estimated at roughly $11–12 billion and projected to expand sharply over the next decade. Nearly 70–80 percent of high-end equipment, particularly advanced imaging and critical care technologies, continues to be imported. Incentives running into thousands of crores aim to reverse that dependence. For a country of India’s size, relying heavily on external supply for critical health technologies is ofcourse a vulnerability.
Yet when healthcare becomes embedded in industrial policy, incentives shift in subtle but consequential ways. Industrial strategy rewards scale, export performance, revenue growth, and margin efficiency. Public health policy prioritises affordability, equity, and measurable reductions in preventable disease. These logics overlap, but they do not naturally align.
Production-linked incentives are tied to output and sales value. Companies are therefore encouraged to focus on high-value products, urban hospital networks, and export-ready markets. Venture capital gravitates toward scalable platforms with global potential. Pricing benchmarks are influenced by international markets rather than district-level purchasing capacity. Obviously none of this is unethical simply rational market behaviour. Markets always optimise for solvency, while public health optimises for survival.
Other countries illustrate how this divergence can unfold. China built one of the world’s most formidable med-tech manufacturing ecosystems through aggressive state support and export orientation churning out globally competitive international players. Yet rural health inequities required deliberate policy correction. Scale did not automatically deliver equity. The United States leads the world in medical device innovation and AI diagnostics but remains one of the most expensive healthcare systems globally, with persistent access gaps. Innovation flourished, but affordability did not inevitably follow. Brazil offers a useful contrast. Its public health system, SUS, is tax-funded and provides free care at the point of use. The government has used its purchasing power to support domestic pharmaceutical production, linking local manufacturing to the needs of its public system rather than relying mainly on exports. India also relies on public procurement through schemes such as Ayushman Bharat and government hospital tenders, but with nearly half of health spending still coming directly from households, private purchasing power continues to shape much of the market. India now stands at a comparable crossroads. Public health expenditure remains around 2 percent of GDP. With out-of-pocket expenditure accounting for nearly half of total health spending as compared to roughly 10–11 percent in the United States, around 22–25 percent in Brazil, about 27–30 percent in China, and close to 15 percent in the United Kingdom, Indian households continue to finance illness largely from their own savings.
India’s out-of-pocket burden today resembles where China stood two decades ago, when more than half of total health spending came directly from households. Over the past twenty years, China reduced that figure to roughly 27–30 percent through expansion of public insurance, increased government spending, and assertive price negotiation. Industrial capacity grew in parallel, but household financial protection improved because the state actively pooled risk and shaped procurement.
Primary care infrastructure still remains uneven across states even as AI-enabled diagnostics and advanced hospital systems receive policy attention and capital inflows.
And so if profitability becomes the organising principle, design bias is inevitable. Devices will be conceived first for high-resource settings and only later adapted for district contexts. Pricing will reflect global benchmarks. Innovation will gravitate towards tertiary care optimisation rather than primary care strengthening. Yet the heaviest disease burdens such as undiagnosed hypertension, tuberculosis detection gaps, maternal risk identification, anaemia are concentrated precisely where margins are thin.
The central question is not whether India should pursue med-tech leadership. It should. The question is whether domestic public health need will anchor that ambition. Will companies be rewarded merely for output and export value, or for ensuring their technologies are affordable and deployed within India’s public health system? Will procurement policies reward affordability and rural usability? Will AI tools be designed from the outset for Primary Health Centres?
History suggests that access does not automatically follow scale. If industrial policy and public health policy evolve on parallel but disconnected tracks, India risks building a technologically advanced yet structurally unequal system.
However, India could choose differently. It could design for Bharat first, embedding equity into the architecture of innovation so that solutions proven in low-resource settings become globally competitive precisely because they are robust and affordable. That would invert the usual sequence where public health would shape markets and not merely benefit from them.
The summit showcased extraordinary technological ambition. The test ahead lies not in algorithms, but in policy design. India can become a manufacturing powerhouse in healthcare. The question is whether that power will first serve its own patients.
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